Cement despatches down 3.55pc on crumbling construction activities

LAHORE: Pakistan’s August cement despatches fell 3.55 percent to 3.33 million tons from a year ago due to weak domestic demand as a slowdown in economy hit once a thriving sector, industry data showed on Friday.

Domestic cement sales in August 2019 declined 8.58 percent to 2.66 million tons as compared to 2.90 million tons in August 2018 on muted construction activity, All Pakistan Cement Manufacturers Association (APCMA) data showed

Exports, however, registered a healthy increase of 22.67 percent to 680,000 tons in August 2019, compared to 560,000 tons in the same period last fiscal year, though India imposed heavy import duties by India on Pakistani products, including cement.

The regular contraction in construction activity has played havoc with the local cement sector, which had increased its capacities to 55.995 million tons. Industry officials also point to rising unemployment as a side effect of the slowdown in construction activities.

Domestic market remained under pressure in the last fiscal as well, absorbing only 40.34 million tons which was almost two percent less than 2017-18.The industry despatched 46.88 million tons of cement in 2018-19 leaving a surplus of 9.12 million tons.

Industry officials said the new fiscal year further added to the misery of the cement sector. Domestic demand decreased by 2.55 percent to 2.97 million tons in July 2019 from 3.04 million tons in July 2018.

It is worth noting that the regular increase in domestic demand in the southern part of the country last fiscal saved the sector from total collapse. However, the uptake of cement has declined, during the curr4ent fiscal year in the south by a massive 32.95 percent in the first two months of 2019/20.

The uptake in up north inched up by only 1.66 percent, which failed to support the declining trend in overall sale. A spokesman of APCMA said consumption of cement determines employment creation in the country. “As local demand declines, the number of jobs also register decline,” he said. “The ever-increasing entry of workforce in the job market demands that steps should be taken to create new employment opportunities.”

The spokesman said the cement industry currently was facing a torrid time. “The state has not helped its cause by slapping further tax on the industry this fiscal,” he added.

He said steps like increase in taxes on cement and high power and gas tariffs accompanied with axle weight condition on cement dispatches reduced the uptake of the commodity in the country. “After withdrawal of axle weight condition the uptake would gradually increase,” he concluded.